La Jolla Pharma soars on drug results

Shares of La Jolla Pharmaceutical zoomed 65 percent Tuesday after the company reported positive results in a trial of its kidney disease drug.

The drug, called GCS-100, met its main goal of improving kidney function in patients with severe chronic kidney disease, the company said after the close of trading Monday. When trading resumed Tuesday, shares skyrocketed. La Jolla Pharmaceutical closed at $18.05; shares had traded for up to $19.50.

The drug treats chronic kidney disease, which causes scarring and loss of kidney function. It inhibits galectin-3, a molecule implicated in scarring in a number of organs. It was studied in a blinded, randomized Phase 2 clinical trial in three dosages, one a placebo, on 117 patients.

The trial tested patients whose kidney disease was caused by different underlying factors, such as diabetes, hypertension, or some other condition, chief executive George Tidmarsh said in a Tuesday conference call.

"It was quite a heterogeneous patient population," Tidmarsh said. "What we found to be quite remarkable in this study ... is that 117 out of 121 patients who enrolled in the study completed all eight doses."

However, biotech reporter Adam Feuerstein said there are "a lot of unanswered questions" on the study. In a Tuesday article about the study on TheStreet.com, Feuerstein wrote that it was strange that the drug's lower dose reduced galectin-3, while the higher dose didn't.

Tidmarsh said the company "to a certain extent predicted" that the higher dose wouldn't work, based on an analysis of patients treated with GCS-100 who also had cancer. Those patients treated with the highest dose did not see a benefit, while those at lower doses appeared to benefit.

"We alerted everyone to what we saw to be, perhaps, an inverse response," Tidmarsh said. Even the lowest dose tested reached a high enough level in blood plasma to inactivate galactin-3, he said. Higher levels of the drug appeared to cause a "rebound" of galectin-3 levels.

Feuerstein wrote that the explanation wasn't convincing without some evidence about the mechanism of this rebound. It's just as plausible that the drug doesn't work at all, and the results are "statistical noise."

John McCamant, editor of the Berkeley-based Medical Technology Stock Letter, said he'd also like to see more evidence of what mechanism would make a lower dose of a drug more effective than a higher one. Without such evidence, the drug isn't ready for a Phase 3 trial, he said.